Temu Q2 GMV reported at $12 billion

According to a recent report from Bernstein, Temu will achieve annual profitability in 2024, with gross merchandise volume (GMV) reaching $54 billion. It is worth noting that Temu is expected to achieve profitability in the UK, Canada, Australia and other countries in the next year, thus opening up the potential of the global market.

Temu Q2 Results

① The total merchandise volume (GMV) reached US$11-12 billion.

② Driven by the adoption of a semi-hosting model where sellers entrust logistics to Temu, GMV profit margin increased slightly month-on-month.

Semi-custodial order

① As of June, semi-custodial model orders accounted for more than 25% of US GMV, and in the second quarter, they accounted for more than 30% of global GMV.

② Categories with heavy weight, large volume and high average order value (AOV), such as electrical appliances and furniture, adopt a semi-hosted model to increase the profit margins of platforms and merchants.

③The semi-hosted model can deliver goods within 3-5 days, reducing long-distance transportation costs and reliance on minimum tariff clauses.

④Semi-hosted model orders started in Europe at the end of May.

Tariff threats and geopolitical concerns

While the latest tariff changes will have an impact on Temu, the impact may be less than expected as the costs are likely to be passed on to consumers and Temu's prices will remain competitive.

① Due to lower costs, lower merchant margins, and access to cheaper products in China, Temu’s prices are still cheaper than Amazon’s even with tariffs as high as 20-25%.

② Adding a semi-trusteeship model can reduce the risk of potential tariffs.

③One-third of Amazon’s third-party merchants are Chinese merchants, and they will also be affected by the new tariffs.

Profitability

①Temu is currently profitable in the United States, with non-GAAP (non-U.S. generally accepted accounting principles) operating profits of approximately $90 million in the first quarter and $150 million in the second quarter.

②Temu is still slightly loss-making in the rest of the world, but is expected to follow the growth trend in the United States within 6-12 months.

Currently, the total retail market in the United States exceeds 7 trillion US dollars, the total retail market in Europe and the United Kingdom is 3 trillion US dollars, and the total retail market in other parts of the world may be 1-2 trillion US dollars. The global retail market has huge potential, and Temu is gradually building its own competitive advantages and becoming a global e-commerce leader.

③The GMV for the whole year of 2024 is expected to be US$54 billion.

Author✎ Summer/
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